After Uninor, Etisalat DB?s joint venture partners, Etisalat and Majestic Infracon (MIPL) have become involved in a dispute.
Currently, MIPL holds around 45.73 stake in Etisalat DB, while Etisalat has around 44.7 per cent stake.
The crux of the dispute is two-fold. First, Etisalat is claiming that it exercised no control over the joint venture?s functions, as Indian authorities did not permit it to pay a control premium of over $ 400 million to MIPL. This was because the authorities allegedly had reservations on Etisalat?s promoter, Shahid Balwa.
Secondly, MIPL has said that Etisalat?s representatives took a unilateral decision to exit the Indian telecom space, following the Supreme Court?s verdict in the 2G case. The company added that Etisalat stood firm on its decision despite being opposed by MIPL?s representatives. Thereafter, MIPL?s officials resigned from the board in protest.
Moreover, both companies have held the other responsible for the joint venture?s current condition.
Etisalat has said that the joint venture?s current condition is owing to MIPL?s officials resigning without nominating appropriate replacements. Also, the company said that MIPL had withdrawn all financial support to the joint venture as well.
Countering this, MIPL said that Etisalat?s representatives have always controlled the company and were thus responsible for its current status.
Net, net, it is believed that MIPL plans to initiate legal proceedings against Etisalat in this regard.
